Delaware Escheat & Unclaimed Property Laws

Delaware is a prominent jurisdiction with regard to unclaimed property as a result of the sheer volume of companies that are incorporated there. Under the “priority rules” of unclaimed property, as determined by the United States Supreme Court Case, Texas v. New Jersey (1965), unclaimed property should first be reported to the state of the last known address of the owner. If that address is unknown, the property should be reported to the holder’s state of incorporation. Because so many companies, both public and private, are domiciled in Delaware, an abundance of unclaimed property is reported there.

As a result, it is important for Delaware domiciled entities to keep up to date with key Delaware unclaimed property laws reporting deadlines. Currently, escheat reporting deadlines for Delaware vary by property type. Depending on the type of property being reported, unclaimed property reports have either fall or spring reporting deadlines. However, the report deadline for most corporations is March 1.

Delaware requires holders to perform due diligence mailings prior to each reporting season. It is recommended to start due diligence mailings early in each reporting cycle to maximize the effectiveness of these campaigns. Since Delaware has multiple unclaimed property reporting deadlines, be sure to review when certain property types are due and plan your mailings accordingly to maximize your outreach to owners.

Delaware Voluntary Disclosure Agreements

Delaware, like many states, utilizes unclaimed property audits to measure an organization’s level of compliance and enforce its laws. Also like other states, Delaware has instituted a voluntary disclosure agreement process, or VDA process, that allows an organization to come forward and report past-due property in exchange for a waiver of the penalties and interest that are often associated with late reporting uncovered through a Delaware unclaimed property audit.

The Delaware VDA process is unique compared to unclaimed property VDA programs offered in other states. It has a unique set of requirements and processes that must be followed in order to complete the program. If your company is interested in entering into a voluntary disclosure agreement in Delaware or any other state, please contact a Sovos specialist for assistance.

Delaware Dormancy Periods

Dormancy periods in Delaware vary by property type. Generally, most property types have a five-year dormancy period. Accounts are considered dormant if the property owner has not indicated any interest in the property, or if no contact has been made by the owner for the allotted dormancy period for that property.

Dormancy periods in Delaware for common property types include:

• Wages, Payroll or Salary: Five years
• Checking Accounts: Five years
• Traveler’s Checks: 15 years

Still confused or overwhelmed? Try the Sovos UP Compliance Hub

Reporting unclaimed property in Delaware, and other jurisdictions, can be a stressful process that consumes valuable internal resources. However, when properly managed, the annual reporting and escheatment process does not need to be a burdensome experience.

The Sovos UP Compliance Hub is a subscription-based service that includes access to multiple educational and operational resources. Sovos compliance experts continuously monitor and update these resources. Compliance Hub subscriptions can be customized to suit your company’s unique business needs and compliance objectives. Connect with the experts at Sovos today to learn more.